Retirement Benefit Plans

12 Months Ended

Dec. 31, 2022

Pension Plan

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefit Plans

Note 16 - Retirement Benefit Plans

The Company and its subsidiaries sponsor a number of defined benefit pension plans, which cover eligible employees, including certain employees in foreign countries. These plans generally are noncontributory. Pension benefits earned generally are based on years of service and compensation during active employment. The cash contributions and payments for the Company’s defined benefit pension plans were $11.2 million, $20.4 million and $17.9 million in 2022, 2021 and 2020, respectively. The 2021 contributions and payments included a $10 million payout of deferred compensation to a former executive officer of the Company.

The following tables summarize the net periodic benefit cost information and the related assumptions used to measure the net periodic benefit cost for the years ended December 31:

	U.S. Plans						International Plans
	2022		2021		2020		2022		2021		2020
Components of net periodic benefit cost:
Service cost	$	6.9	$	9.5	$	10.7	$	1.6	$	2.0	$	1.8
Interest cost	17.7		17.6		21.0		5.7		4.4		5.5
Expected return on plan assets	(18.9)		(23.2)		(25.3)		(9.3)		(10.2)		(8.7)
Amortization of prior service cost	1.2		1.2		1.6		0.1		0.2		0.2
Recognition of net actuarial losses    (gains)	22.6		13.9		(3.9)		(6.6)		(9.5)		20.1
Curtailment losses	—		—		0.9		—		—		—
Net periodic benefit cost (credit)	$	29.5	$	19.0	$	5.0	$	(8.5)	$	(13.1)	$	18.9

Assumptions	2022	2021		2020
U.S. Plans:
Discount rate	3.03% to 4.95%	2.71% to 2.91%		3.04% to 3.55%
Future compensation assumption	2.50% to 3.50%	2.50	%	2.50	%
Expected long-term return on plan assets	4.35% to 5.65%	4.15% to 4.90%		4.50% to 6.25%
International Plans:
Discount rate	1.00% to 9.50%	0.25% to 7.75%		0.75% to 9.00%
Future compensation assumption	2.10% to 8.00%	1.90% to 8.18%		2.00% to 8.20%
Expected long-term return on plan assets	2.00% to 8.90%	2.00% to 9.00%		1.75% to 9.00%

The following table summarizes assumptions used to measure the benefit obligation for the defined benefit pension plans at December 31:

Assumptions	2022	2021
U.S. Plans:
Discount rate	5.62% to 5.74%	3.03% to 3.09%
Future compensation assumption	2.50%	2.50% to 3.50%
International Plans:
Discount rate	3.70% to 10.70%	1.00% to 9.50%
Future compensation assumption	2.80% to 10.00%	2.10% to 8.00%

Note 16 - Retirement Benefit Plans (continued)

The Company recognized actuarial losses of $16.0 million during 2022 primarily due to the impact of lower than expected returns on plan assets of $220.6 million, the impact of experience losses of $33.0 million, the impact of inflation of $5.4 million and other actuarial losses of $0.2 million, partially offset by the favorable impact of a net increase in the discount rate used to measure its defined benefit pension obligations of $243.2 million. The impact of the net increase in the discount rate used to measure the Company's defined benefit pension obligations was primarily driven by a 257 basis point increase in the weighted-average discount rate used to measure its U.S. plan obligations, which increased from 3.07% in 2021 to 5.64% in 2022 and a 301 basis point increase in the discount rate used to measure its U.K. plan obligations, which increased from 1.80% in 2021 to 4.81% in 2022.

The Company recognized actuarial losses of $4.4 million during 2021 primarily due to the impact of lower than expected returns on plan assets of $28.4 million, the impact of experience losses of $9.3 million, the impact of inflation of $8.5 million and other changes in actuarial assumptions of $3.2 million, partially offset by the favorable impact of a net increase in the discount rate used to measure its defined benefit pension obligations of $45.0 million. The impact of the net increase in the discount rate used to measure the Company's defined benefit pension obligations was primarily driven by a 55 basis point increase in the discount rate used to measure its U.K. plan obligations, which increased from 1.25% in 2020 to 1.80% in 2021, and a 23 basis point increase in the weighted-average discount rate used to measure its U.S. plan obligations, which increased from 2.84% in 2020 to 3.07% in 2021.

The Company recognized actuarial losses of $16.2 million during 2020 primarily due to the impact of a net reduction in the discount rate used to measure its defined benefit pension obligations of $88.0 million and the impact of experience losses of $16.9 million, partially offset by higher than expected returns on plan assets of $84.3 million and other changes in valuation assumptions of $4.4 million. The impact of the net reduction in the discount rate used to measure the Company's defined benefit pension obligations was primarily driven by a 66 basis point reduction in the weighted-average discount rate used to measure its U.S. plan obligations, which decreased from 3.50% in 2019 to 2.84% in 2020.

For expense purposes in 2022, the Company applied a weighted-average discount rate of 3.07% to its U.S. defined benefit pension plans. For expense purposes in 2023, the Company will apply a weighted-average discount rate of 5.64% to its U.S. defined benefit pension plans.

For expense purposes in 2022, the Company applied a weighted-average expected rate of return of 4.84% for the Company’s U.S. pension plan assets. For expense purposes in 2023, the Company will apply a weighted-average expected rate of return on plan assets of 4.43%.

Note 16 - Retirement Benefit Plans (continued)

The following tables set forth the change in benefit obligation, change in plan assets, funded status and amounts recognized on the Consolidated Balance Sheets for the defined benefit pension plans as of December 31, 2022 and 2021:

	U.S. Plans				International Plans
	2022		2021		2022		2021
Change in benefit obligation:
Benefit obligation at beginning of year	$	566.3	$	663.1	$	343.1	$	379.7
Service cost	6.9		9.5		1.6		2.0
Interest cost	17.7		17.6		5.7		4.4
Plan amendments	—		—		—		0.5
Actuarial gains	(116.4)		(4.4)		(88.2)		(19.6)
International plan exchange rate change	—		—		(32.6)		(8.7)
Benefits paid	(139.2)		(119.5)		(14.7)		(15.2)
Acquisitions	—		—		3.2		—
Benefit obligation at end of year	$	335.3	$	566.3	$	218.1	$	343.1

Change in plan assets:
Fair value of plan assets at beginning of year	$	455.7	$	553.3	$	296.8	$	312.8
Actual return on plan assets	(120.1)		4.9		(72.3)		0.1
Company contributions / payments	5.2		17.0		6.0		3.4
International plan exchange rate change	—		—		(30.3)		(4.3)
Benefits paid	(139.2)		(119.5)		(14.7)		(15.2)
Fair value of plan assets at end of year	201.6		455.7		185.5		296.8
Funded status at end of year	$	(133.7)	$	(110.6)	$	(32.6)	$	(46.3)

Amounts recognized on the Consolidated Balance Sheets:
Non-current assets	$	—	$	1.1	$	0.3	$	3.9
Current liabilities	(4.8)		(4.9)		(1.5)		(1.4)
Non-current liabilities	(128.9)		(106.8)		(31.4)		(48.8)
	$	(133.7)	$	(110.6)	$	(32.6)	$	(46.3)

Amounts recognized in accumulated other comprehensive      loss (income):
Net prior service cost	$	0.3	$	1.5	$	3.6	$	4.2
Accumulated other comprehensive loss (income)	$	0.3	$	1.5	$	3.6	$	4.2

Changes in prior service cost recognized in accumulated other comprehensive loss (income):
Accumulated other comprehensive loss (income) at beginning      of year	$	1.5	$	2.7	$	4.2	$	3.9
Prior service cost	—		—		—		0.5
Recognized prior service cost	(1.2)		(1.2)		(0.1)		(0.2)
Foreign currency impact	—		—		(0.5)		—
Total recognized in accumulated other comprehensive      loss (income) at December 31	$	0.3	$	1.5	$	3.6	$	4.2

Note 16 - Retirement Benefit Plans (continued)

The presentation in the above tables for amounts recognized in accumulated other comprehensive loss on the Consolidated Balance Sheets is before the effect of income taxes.

Defined benefit pension plans in the U.S. represent 61% of the benefit obligation and 52% of the fair value of plan assets as of December 31, 2022.

Certain of the Company’s defined benefit pension plans were overfunded as of December 31, 2022. As a result, $0.3 million and $5.0 million at December 31, 2022 and 2021, respectively, are included in other non-current assets on the Consolidated Balance Sheets. The current portion of accrued pension benefits, which was included in salaries, wages and benefits on the Consolidated Balance Sheets, was $6.3 million at December 31, 2022 and 2021, respectively. In 2022, the current portion of accrued pension benefits relates to unfunded plans and represents the actuarial present value of expected payments related to the plans to be made over the next 12 months.

The accumulated benefit obligation at December 31, 2022 exceeded the market value of plan assets for several of the Company’s pension plans. For these plans, the projected benefit obligation was $544.2 million, the accumulated benefit obligation was $539.9 million and the fair value of plan assets was $378.0 million at December 31, 2022.

The total accumulated benefit obligation for all plans was $546.0 million and $897.6 million at December 31, 2022 and 2021, respectively.

Investment performance decreased the value of the Company’s pension assets by 26.7% in 2022 largely due to increases in bond rates.

As of December 31, 2022, 2021 and 2020, the Company’s defined benefit pension plans did not directly hold any of the Company’s common shares.

Plan Assets:

The Company’s target allocation for pension plan assets, as well as the actual pension plan asset allocations as of December 31, 2022 and 2021, was as follows: 

	Current Target Allocation			Percentage of Pension Plan Assets at December 31,
Asset Category				2022	2021
Equity securities	16%	to	22%	18%	19%
Fixed income securities	72%	to	82%	77%	78%
Other investments	2%	to	6%	5%	3%
Total				100%	100%

The Company recognizes its overall responsibility to ensure that the assets of its various defined benefit pension plans are managed effectively and prudently and in compliance with its policy guidelines and all applicable laws. Preservation of capital is important; however, the Company also recognizes that appropriate levels of risk are necessary to allow its investment managers to achieve satisfactory long-term results consistent with the objectives and the fiduciary character of the pension funds. Asset allocations are established in a manner consistent with projected plan liabilities, benefit payments and expected rates of return for various asset classes, and are reviewed regularly by management. The expected rate of return for the investment portfolio is based on expected rates of return for various asset classes, as well as historical asset class and fund performance.

Note 16 - Retirement Benefit Plans (continued)

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The FASB provides accounting rules that classify the inputs used to measure fair value into the following hierarchy:

Level 1 -Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 -Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3 -Unobservable inputs for the asset or liability.

The following table presents the fair value hierarchy for those investments of the Company’s pension assets measured at fair value on a recurring basis:

	December 31, 2022								December 31, 2021
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	22.9	$	—	$	—	$	22.9	$	13.8	$	—	$	—	$	13.8
Government and agency securities	10.7		0.9		—		11.6		22.7		2.7		—		25.4
Corporate bonds - investment grade	—		31.5		—		31.5		—		82.7		—		82.7
Equity securities - U.S. companies	0.1		—		—		0.1		—		—		—		—
Common collective funds - fixed income	29.9		—		—		29.9		42.5		—		—		42.5
Mutual funds - fixed income	31.6		—		—		31.6		51.8		—		—		51.8
Mutual funds - international equity	21.5		—		—		21.5		41.0		—		—		41.0
	$	116.7	$	32.4	$	—	$	149.1	$	171.8	$	85.4	$	—	$	257.2
Investments measured at net asset value:
Equity securities - international companies							$	0.4							$	0.3
Common collective funds - domestic equities							19.9								45.9
Common collective funds - international equities							17.5								33.6
Common collective funds - fixed income							82.6								216.6
Common collective funds - diversified growth							12.1								18.5
Limited partnerships							6.8								10.4
Real estate partnerships							5.2								6.6
Other liability-driven investments							68.6								138.1
Other assets							24.9								25.3
Total Assets							$	387.1							$	752.5

International investments measured at net asset value totaled $155.0 million and $253.5 million at December 31, 2022 and 2021, respectively.

Cash and cash equivalents are valued at redemption value. Government and agency securities are valued at the closing price reported in the active market in which the individual securities are traded. Certain corporate bonds are valued at the closing price reported in the active market in which the bond is traded. Equity securities (both common and preferred stock) are valued at the closing price reported in the active market in which the individual security is traded. Common collective funds are valued based on a net asset value per share. Mutual funds classified as Level 1 assets include investments in fixed income and international equities. These investments are comprised of securities listed on exchange, market, or automated quotation systems, for which active, quoted prices are available. Mutual funds are valued based on a net asset value per share for shares held at year end, as determined by the closing price reported on the active market on which the individual securities are traded, or a pricing vendor or the fund family if an active market is not available. Asset-backed securities are valued based on quoted prices for similar assets in active markets. When such prices are unavailable, the plan trustee determines a valuation from the market maker dealing in the particular security.

Note 16 - Retirement Benefit Plans (continued)

Limited partnerships include investments in funds that invest primarily in private equity, venture capital and distressed debt. Limited partnerships are valued based on the ownership interest in the net asset value of the investment, which is used as a practical expedient to fair value, per the underlying investment fund, which is based upon the general partner's own assumptions about the assumptions a market participant would use in pricing the assets and liabilities of the partnership. Real estate investments include funds that invest in companies that primarily invest in commercial and residential properties, commercial mortgage-backed securities, debt and equity securities of real estate operating companies, and real estate investment trusts. Other real estate investments are valued based on the ownership interest in the net asset value of the investment, which is used as a practical expedient to fair value per the underlying investment fund, which is based on appraised values and current transaction prices.

Other liability-driven investments mainly include investments in index-linked open-end swap funds. These funds invest in cash held deposits that reflect the index-linked deferred annuity with payment terms of specific years linked to UK inflation measures. The underlying assets in this investment are valued daily.

Common collective funds - diversified growth investments are pooled funds that invest in a multiple underlying asset classes, such as equities, fixed income, commodities, alternative investments, and cash in an effort to achieve returns on investment through capital appreciation and income. The underlying assets in this investment are valued daily.

Cash Flows:

Employer Contributions to Defined Benefit Plans
2021	$	20.4
2022	11.2
2023 (estimated)	25.0

Estimated future benefit payments, including estimated lump sum distributions, are expected to be as follows:

Benefit Payments
2023	$	49.6
2024	43.0
2025	44.0
2026	45.3
2027	42.7
2028-2032	203.3

Employee Savings Plans:

The Company sponsors defined contribution retirement and savings plans covering substantially all employees in the United States and employees at certain non-U.S. locations. The Company made contributions to its defined contribution plans of $29.4 million, $27.3 million and $27.1 million in 2022, 2021 and 2020, respectively. Effective January 1, 2019, the primary U.S. Company sponsored defined contribution plan no longer allowed contributions to be made to the Company stock fund in order to align with industry trends to remove investments in company stock as an option in a company sponsored defined contribution plan. All participants in this plan were instructed to transfer remaining funds in the Company stock fund to other fund options by December 31, 2022. At December 31, 2022, the plans held 682,831 of the Company’s common shares with a fair value of $48.3 million. These remaining common shares were fully transferred out of the Company stock fund in January 2023. The Company paid dividends totaling $1.0 million, $1.2 million and $1.5 million in 2022, 2021 and 2020, respectively, to plans to be disbursed to participant accounts holding the Company’s common shares.